Enough excuses, Eskom!

OPINION

It is not their fault but the South African public will not give the new Eskom board a honeymoon period to end the country’s worst year of power blackouts. 

They must understand the scale of the damage to the economy and Eskom plants that happened under the useless leadership of the shareholder and the previous board since January 2018 and heed the call of the Black Business Council, which said: “The BBC would like to advise the new board their first responsibility and task is to release the incompetent CEO and COO as they have plunged the country into darkness.”

In interviews, Eskom chair Mpho Makwana has asked the public to give the new board space — 60 to 90 days — to visit the utility’s plants as part of the onboarding process and to do a proper assessment. 

“The key thing is to give the existing team the benefit of the doubt. We must work with them to understand the existing strategy. We want to take an objective look at where things are. 

“My appeal to the people of South Africa is, I know that it is painful, but we should let facts and figures dictate how we turn things around,” he said.

However, the facts and figures provide a compelling case for chief executive André de Ruyter and chief operating officer Jan Oberholzer’s heads to roll too.  

Exhibit number one on the charge sheet is an analysis of Eskom’s annual reports over the past century. Until recently, the utility never had plant performance issues. 

During the year to March 2018, Eskom had an energy availability factor (EAF) of 78%. Unplanned breakdowns were at 10.18%. Planned maintenance was at 10.35%. 

Since then, Eskom’s board and top management have wrecked the power stations. There was a sudden collapse in plant performance and more than 20 000MW has been regularly down since the start of the year. 

On 5 October, an Eskom press release showed the EAF had collapsed to 55% and 21 339MW was down. Unplanned breakdowns were at 30.9% of installed capacity. 

Exhibit two is the Council for Scientific and Industrial Research’s load-shedding statistics. South Africa shed 10 194 gigawatt hours (GWh) of energy from 2007 to June. 

The energy shed since 2018, when the previous board was appointed, accounted for 78.6% of all energy shed since 2007. The period since De Ruyter became chief executive in January 2020 accounts for 63.7% of all energy shed since 2007. In the 30 months to June, Eskom shed 6 390GWh — 1.8 times more energy than was shed during the 13 years before he became chief executive. 

The power blackouts have cost the economy R570-billion, based on a gazetted cost of unserved energy of R87.75c/kilowatt hour.

Eskom’s propaganda has made six arguments in defence of De Ruyter. 

First, Eskom repeatedly says there is a shortfall of 4 000MW to 6 000MW and blames everyone else for the load-shedding. But Eskom’s incompetence created this shortfall. If Eskom fixed its plants and achieved an EAF of 75%, there would be no shortfall. There would be an additional capacity of 7 000MW.

Second, it has been claimed Eskom power stations are too old to function efficiently. But the average age is 28 years. Former chief executive Jacob Maroga told TV station eNCA: “Power stations can work for 60 to 70 years. At Eskom, you do not see a correlation between age and performance. There are power stations that are performing at 90% and others of the same age that are at 30%.”

Third, Eskom says De Ruyter’s predecessors did not maintain the power stations. Exhibit three is Eskom’s 2021 annual report, which shows it had an average planned maintenance ratio of 11.8% from 2016 to 2018. This was above the target of 10%. 

Under De Ruyter, the planned maintenance ratio increased to 12.3% last year. Eskom spent R16.6-billion on maintenance last year but plant performance has deteriorated. 

Matthew Mflathelwa, Eskom’s head of strategy and planning, told eNCA: “The maintenance we are doing has not yielded results.”

Fourth, Eskom says De Ruyter’s predecessors ran the power stations too hard. Exhibit four is Eskom’s 2021 annual report. It shows there was a sharp decline in the energy utilisation factor — a measure of how hard plants are run — from 82.7% in 2016 to 71.6% in 2018. The ideal threshold is 80%, the National Society of Black Engineers says. 

But there is nothing wrong with running the plants hard if there is a planned maintenance ratio of 10%, it says. In 2016, the ratio was 13%.

Fifth, there have been claims of sabotage. Mflathelelwa said: “Are  there acts of sabotage? Yes. Are they the primary contributor to load-shedding? No.” 

The scale of unplanned breakdowns — with about a third of installed capacity this year regularly down — is what one would expect under conditions of war or a terrorist organisations attacking Eskom’s infrastructure every year. 

Finally, Eskom blames state capture for power blackouts. But state capture cannot be an excuse for incompetence as Maroga says: “For every excuse to be state capture … you have to make a direct link. 

“If Lethabo can run at an EAF of 80% and Kendall runs at 30%, where is the state capture? You must connect these things. I agree there has been state capture and certain contracts were isolated. But we must not extrapolate things that are not connected. When there is a power station management problem, you can’t blame state capture.”

If the economy is the overriding priority, there must be a short-term solution to the power crisis. De Ruyter has shown no interest in fixing the fleet. It is not clear what new information the board needs to come to the same conclusion as the majority of South Africans that he is incapable of fixing the mess. 

As BBC president Elias Mongale says: “If the board delays the inevitable, it will ruin the prospect of an economic recovery. The ANC will suffer in the 2024 national elections. And a new coalition government will mark the end of an agenda for transforming the apartheid economy.”

Duma Gqubule is a financial journalist, analyst, researcher and adviser on issues of economic development and transformation. 

The views expressed are those of the author and do not necessarily reflect the official policy or position of the Mail & Guardian.

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